Last discussion of Lepanto and the 16th century battles for the Mediterranean, I promise. At least for now.
An incredibly divided multinational force--Venetian, Spanish, Italian, and the Knights of St. John--internally hostile and suspicious, started late in the year. If the Ottoman commander, Uluch Ali, had chosen not to leave his harbor within the Gulf of Patras, there was no way the Europeans could have gotten him out. And, though the battle on October 7, 1571 went heavily for the Christians during the day, it could easily have gone the other way.
Lepanto, dramatic as it was, was not decisive. Ottoman domination of the eastern Mediterranean continued. Cyprus had fallen. As long as a century later, in 1683, Ottoman forces were seriously threatening Vienna.
The hinge here is if the Europeans had lost. Then Venice, and all of Italy, would have been open to Ottoman invasion. A Rome under Turkish rule is one of those interesting counterfactuals we science fiction writers like to play with. The entire Reformation would look quite different with the heart of Catholicism taken out and turned over to a resurgent Islam.
The Turks did not pursue their expansion into the western Mediterranean after Lepanto, so maybe it did check them. But they did not really regard it as a strategic defeat. When do nations recognize defeat? How do they recognize it?
After Hannibal's invasion of Italy, the Romans lost at Trebia, Lake Trasimene, Cannae. Massive, incredible defeats. But they did not recognize them. Hannibal was probably hoping for them to cave in, as any Hellenistic monarchy of the time certainly would have.
When Romanus IV Diogenes loast the battle of Manzikert, in Anatolia, in 1071 to the Seljuk Turks (slightly different folk than the Ottomans), the period of Byzantine ascendancy was over. But the battle, while a defeat, was not a gigantic one. Most Byzantine forces survived. Anatolia, the heartland of Asia Minor that was a source of wealth and troops to the empire, was lost over the following years, piecemeal. The battle seemed more a symbol of defeat than anything else. It had been a sign that their time was over. The Ottomans did not see Lepanto as a sign, and the Romans did not see their repeated defeats as a sign either.
Writers of history and writers of fiction like "decisive battles". It makes for a good story. And the nation that loses the battle is always seen as decadent, collapsing, riven with internal struggles, on the way down. Losing the battle is seen as a judgment, even as a sort of justice. But wealthy powerful nations sometimes have bad luck, bad commanders, or even, as it happens, bad soldiers. It is what they do with the battle that is usually more important than what happened in the battle itself.